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Merlo, Accountant

Category: Tax

Satisfied Customers: 9783

Experience: 25+ years tax consulting. Specializing in returns for US citizens living abroad

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If I live in Ohio, and work in Michigan, do I need to pay local

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If I live in Ohio, and work in Michigan, do I need to pay local taxes to the city that I live in? Right now, I am paying no local taxes, as the city I work in, in Michigan, does not have a local income tax.

The City of Toledo does impose an income tax. The tax applies to salaries and wages and compensation for personal services earned by Toledo residents anywhere it is earned and also applies to non residents of Toledo for work done or for services they performed in the City of Toledo. See item # XXXXX on the instruction page of the following Toledo tax return.

Actually it is not the employer's responsibility to withhold those taxes, unless you work inside of the city of Toledo. When you work for an employer in another state, they are only obligated to withhold state and local taxes based on where you work. The states of OH and MI happen to have reciprocal agreements in place where the employer only needs to withhold OH state taxes even though you are working in MI. But the same provision does not apply to local earnings tax.

For local earnings taxes, the only employers obligated to withhold this tax are employers located inside of Toledo. For residents of Toledo who work in another city, it is their own responsibility to file a return and pay these taxes each year. You can request that an employer withhold the tax from your checks, but they are under no obligation to do so.

I am sorry I could not give you better news on this, but unfortunately there really is no recourse here, at least with the employer. If the city of Toledo has also assessed you interest and penalties on the tax you owe, you can try to negotiate with them to have those extra charges reduced or waived, but that would be your only option here.

There really are no forms or formal details on how to go about that, and of course there is also no guarantee they will reduce or remove those fees. I would suggest simply writing a letter to the city and explain to them that you were not aware that this tax applied to residents who did not work in the city of Toledo, and see if they will possibly work with you in reducing or eliminating those fees.

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. OrvilleHesperia, California

25+ years tax consulting. Specializing in returns for US citizens living abroad

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